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Income Tax-Exempt Incomes

Exemption Under Section 10(5) not Available in case of Foreign Travel--Recent Ruling of Supreme Court

CA. Nisha Bhandari

Recently the Supreme Court has rendered a significant ruling in SBI v. Asstt. CIT's case regarding availability of exemption under Section 10(5) in respect of leave travel concession (LTC) where travel involves foreign travel also. The present write up analyses the said ruling of the Supreme Court.

1. Exemption when available under Section 10(5) read with Rule 2B

The value of any travel concession or assistance received by or due to an employee from his employer or former employer for himself and his family, in connection with his proceeding (a) on leave to any place in India, or (b) on retirement from service, or after termination of service to any place in India is exempt under Section 10(5) of the Act. However, such exemption is subject to the conditions mentioned in Rule 2B of the Income Tax Rules, 1962

Accordingly, the amount of exemption will be as under --

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